[Federal Register: February 4, 2003 (Volume 68, Number 23)]
[Rules and Regulations]
[Page 5530-5538]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04fe03-2]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 875
RIN 3206-AJ71
Federal Long Term Care Insurance Regulation
AGENCY: Office of Personnel Management.
[[Page 5531]]
ACTION: Interim rule with request for comments.
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SUMMARY: In compliance with the Long-Term Care Security Act, the Office
of Personnel Management (OPM) is issuing interim regulations that set
forth rules for the administration of the Federal Long Term Care
Insurance Program (FLTCIP).
DATES: Effective Date: February 4, 2003.
Comment Date: Comments due on or before April 7, 2003.
ADDRESSES: Send or deliver written comments to Frank D. Titus,
Assistant Director for Long Term Care, Office of Personnel Management,
Room 2H24, 1900 E Street NW., Washington DC 20415, or by fax to (202)
606-2023. You may send comments electronically to ltc@opm.gov, using
the subject line ``Comments on Proposed Regulations.''
FOR FURTHER INFORMATION CONTACT: Terry Schleicher, (202) 606-0417, or
tlschlei@opm.gov.
SUPPLEMENTARY INFORMATION: On September 19, 2000, the Long-Term Care
Security Act (Pub. L. 106-265) became law. The Act directs OPM to
prescribe regulations necessary to carry out the law.
In new part 875, subpart A provides definitions, methods for
contract and claims dispute resolution, and the authority for OPM to
order correction of errors. It also sets out agency and OPM
responsibilities under this Program.
The Act provides preemption of State insurance laws that relate to
the nature, provision, or extent of coverage or benefits under FLTCIP.
The regulations specify OPM's authority to act as the regulator for
FLTCIP in accordance with the Act and the consumer protection
provisions of the Health Insurance Portability and Accountability Act
of 1996.
OPM has determined that the enrollee's proof of insurance will
consist of a benefit booklet prepared by OPM and the Carrier, together
with the schedule of benefits. The enrollee will also receive a copy of
the approved application for coverage. The booklet will provide general
FLTCIP provisions, definitions, exclusions, and limitations. The
schedule of benefits will specify the coverage purchased (e.g., waiting
period, daily benefit amount, benefit period, type of inflation
protection, and either a comprehensive package or a facilities only
package). The approved application will show the specific information
that provided the basis for issuing the coverage. This will help to
reduce Program costs by eliminating the expense of preparing a
customized certificate of insurance for each enrollee.
Subpart B specifies eligibility requirements for, and exclusions
from, participation in the FLTCIP for Federal civilian employees,
Postal employees, members of the uniformed services, civilian
annuitants, retired members of the uniformed services, and their
qualified relatives.
The FLTCIP law defines an eligible Federal or Postal employee as
someone also eligible for Federal Employees Health Benefits (FEHB)
participation. Therefore, Federal civilian and Postal eligibility for
and exclusions from coverage are tied to FEHB regulations found in part
890 of this chapter. There are 2 exceptions, however. The FLTCIP law
specifically excludes all District of Columbia employees from
participation, even though some are eligible for FEHB coverage. The
regulations make this exclusion clear. Also, Tennessee Valley Authority
employees are eligible for FLTCIP participation, even though by law
they may not be eligible for FEHB.
Civilian annuitants eligible to apply for coverage under the FLTCIP
law include those who have retired on an immediate annuity, deferred
annuitants when they begin to receive an annuity, and survivor
annuitants.
The regulations specify that if an employee has separated from
service under the Federal Employees Retirement System (FERS) Minimum
Retirement Age (MRA) + 10 provision (5 U.S.C. 8412(g)), but has not
begun drawing an annuity, he or she can apply for coverage under the
FLTCIP. He or she will be considered an annuitant for underwriting
purposes.
A retired member of the uniformed services is eligible to apply for
coverage if he or she is entitled to retired or retainer pay, even if
that member is receiving disability retirement pay. However, the FLTCIP
law specifies that a former member of the uniformed services retired
under chapter 1223 of title 10, United States Code, (a ``gray
reservist'') is not eligible to apply for coverage until he or she
starts receiving retirement pay at age 60.
If an individual applies as a qualified relative, the regulations
specify that the workforce member (Federal civilian or Postal employee,
Federal annuitant, member of the uniformed services, or retired member
of the uniformed services) on whom the applicant bases the qualified
relative status must be alive at the time the applicant applies for
coverage. There is 1 exception to this rule. If the applicant is
receiving an annuity as the spouse of a deceased workforce member, then
he or she may apply for coverage.
A new employee or member of the uniformed services and his or her
spouse will have a 60-day period after becoming eligible to apply for
coverage with the same underwriting requirements provided to that
eligible group during the most recent open season.
If a Federal civilian or Postal employee or member of the uniformed
services held a position that did not convey eligibility for FLTCIP
coverage, and then enters into a position that conveys eligibility, he
or she also has a 60-day period to apply for coverage with the same
underwriting requirements provided to that eligible group during the
most recent open season, as well as his or her spouse, if any. For
example, if an employee was not eligible because he or she was a
temporary employee who had worked less than 1 year, and then took a
permanent position, he or she would now be eligible to apply for FLTCIP
coverage.
If a Federal civilian or Postal employee or member of the uniformed
services is returning from a break in service of 180 days or more, he
or she may apply for coverage with the same underwriting requirements
provided to that eligible group during the most recent open season, as
may his or her spouse, if any.
Other qualified relatives may apply for enrollment at any time with
full underwriting.
If a Federal civilian or Postal employee or member of the uniformed
services returns from nonpay status during an open season, he or she
can apply for coverage within 60 days from return to pay status, or by
the end of the open season, whichever provides more time. For example,
if the open season runs from July 1 through December 31, and an
individual returns on October 15, he or she still gets until December
31 to apply with the open season underwriting requirements for his or
her eligibility group. If he or she returns on November 15, he or she
will have until January 14 to apply. If he or she returns after the
open season has ended, he or she can apply with the open season
underwriting requirements of his or her eligibility group within 60
days from his or her return. This section only applies when the
applicant is in nonpay status for more than one-half of the scheduled
open season, unless he or she went into nonpay status for a reason
beyond his or her control. If the applicant has been actively at work
for at least one-half of the open season, he or she has already had
ample opportunity to get information and apply for coverage without the
need for the special provisions of this section.
[[Page 5532]]
The regulations prescribe that an applicant must state his or her
employment/retirement status or relationship as a qualified relative
when applying for coverage. If the applicant misrepresents his or her
eligibility, he or she may lose his or her coverage or it may never
become effective.
The applicant must remain a member of an eligible group for
coverage to take effect. If he or she becomes ineligible between the
date that the application is submitted and the coverage effective date,
he or she will no longer be eligible for coverage. This may happen when
the applicant separates from service without retiring or when he or she
loses qualified relative status, such as through divorce. There are 2
exceptions to this rule, explained below.
If the separation from service is involuntary, such as through a
reduction in force, the application (and the application of any
qualified relatives) will proceed. If the application is approved, the
applicant will be enrolled for coverage. However, if the individual had
not applied for coverage before separation, he or she is no longer
eligible at separation. Qualified relatives also lose their eligibility
at the same time.
If an applicant's involuntary separation is due to misconduct or a
dishonorable discharge, then he or she immediately becomes ineligible,
regardless of whether the applicant had applied for coverage prior to
separation. This is consistent with temporary continuation of coverage
requirements under the FEHB Program, which do not allow for continued
enrollment if the separation is due to misconduct.
The second exception is when an applicant loses qualified relative
status through the death of a workforce member. If the person through
whom the applicant is qualified for coverage dies after the applicant
has submitted an application but before the application is approved, he
or she does not lose eligibility. If the application is approved, he or
she will be enrolled for coverage.
Eligibility status may change between the time of application for
coverage and the coverage effective date. The applicant may have
retired or separated from service under FERS MRA +10 provisions. Or,
the applicant may have separated from service but still may be eligible
because he or she is the qualified relative of an employee or
annuitant. The applicant must reapply for coverage in these instances,
submitting to the underwriting requirements specified for the eligible
group of which he or she is now a part. For example, if an applicant
separates from active service, but is also the spouse of an employee,
he or she remains eligible for coverage. But, he or she will have to
resubmit the application with the additional underwriting required of
employees' spouses.
Subpart C addresses payment issues under the FLTCIP. As specified
in the FLTCIP law, there is no Government contribution toward premiums
for long term care insurance. The enrollee pays the entire cost.
If the enrollee underpays premiums, he or she must pay retroactive
premiums to the Carrier. If he or she does not repay such premiums, the
Carrier may cancel coverage. Conversely, if the enrollee has overpaid
premiums, the Carrier will either reimburse the enrollee or apply the
overpayment toward future premium payments due.
The regulations specify that an enrollee will not receive a refund
of premiums if he or she decreases coverage, cancels coverage, or dies.
The enrollee must pay for the coverage agreed to for the period that it
was in effect. The enrollee is not entitled to a refund just because
coverage was not used. This is consistent with Federal Employees' Group
Life Insurance (FEGLI) Program rules, where there is no provision for
the refund of premiums when an enrollee decides to reduce or cancel
coverage. There are some exceptions for FLTCIP. Premiums paid in
advance for the period beyond the date of death or for any period
following the effective date of cancellation will be refunded. Any
premiums paid will be returned if the enrollee cancels coverage within
the ``free look'' period specified in the benefit booklet.
A requirement of the FLTCIP law is for the Carrier to account for
FLTCIP funds separately from all other funds. This requirement, which
is also found in FEHB and FEGLI regulations, ensures that Program funds
can be traced and examined for accounting and audit purposes. The
Carrier is also required to only use FLTCIP funds for purposes related
specifically to the FLTCIP, such as administering the Program and
paying claims.
Subpart D describes coverage requirements. Before the first open
season for enrollment, OPM will determine the ways in which applicants
can apply for coverage. OPM may allow enrollment on paper and various
electronic formats. However, OPM does not believe it necessary to
specify in regulation the different formats of enrollment applications.
OPM believes FLTCIP is best served by using the most current technology
available at any time without going through a regulatory process to do
so.
It is not necessary for the workforce member to apply for coverage
in order for his or her qualified relatives to be able to apply for
coverage. For example, the parents of an employee may submit
applications even if the employee decides not to apply. OPM wants each
qualified relative to have maximum flexibility and unrestricted
opportunity to apply for and select the coverage or cost that works
best for him or her.
OPM does not plan to have regularly scheduled open seasons. There
may be open seasons with abbreviated underwriting requirements for some
eligible groups when OPM determines it is in the best interest of the
FLTCIP. OPM will specify open season beginning and ending dates, as
well as the requirements for applicants during the open season, in
Federal Register Notices.
The FLTCIP Carrier will accept applications for coverage at any
time. Any workforce member or qualified relative may apply, subject to
full underwriting requirements. (OPM may or may not reduce underwriting
requirements during an open season.)
In order to prevent adverse selection and thus keep the FLTCIP
viable, OPM must require full underwriting outside of an open season
even for Federal civilian and Postal employees and members of the
uniformed services. Adverse selection occurs when someone enrolls only
when it is apparent that he or she will need access to benefits. By
deferring enrollment until benefits are needed, such individuals likely
would not pay their fair share of overall premiums.
OPM will announce effective dates of coverage for open season
enrollments in a Federal Register Notice. The effective date will be
different for each open season. At any time outside of an open season,
an applicant's coverage effective date is the first day of the month
after the approval date of the application. For example, if an
application is approved on November 1, then the coverage effective date
is the first day of the next month, December 1.
There are some situations in addition to open season in which
Federal civilian and Postal employees and members of the uniformed
services will be eligible for abbreviated underwriting, such as when
they become newly eligible for FLTCIP (see Sec. 875.206). In such
situations, the applicant must also be actively at work on the coverage
effective date for coverage to actually go into effect. This
requirement protects FLTCIP's stability. With abbreviated underwriting,
only a few questions are
[[Page 5533]]
asked about the applicant's health status. If an employee is actively
at work, he or she is less likely to go into claims status shortly. As
discussed previously, it is important to protect the FLTCIP against
adverse selection.
If an applicant is not actively at work on the coverage effective
date, he or she must inform the Carrier. He or she will get a revised
coverage effective date, which will be the first day of the month after
his or her return to active work. But, he or she must also be actively
at work on the revised coverage effective date for coverage to take
effect. If that is not the case, then the applicant must inform the
Carrier, and the process of issuing a revised effective date will begin
again.
A newly married spouse of a Federal civilian or Postal employee or
member of the uniformed services may apply for coverage within 60 days
of marriage with the same underwriting requirements provided to this
group during the most recent open season. However, if the employee or
member of the uniformed services is not already enrolled, and wants to
apply for coverage at the same time, then he or she must apply with
full underwriting. This person already had the opportunity to apply
with abbreviated underwriting and does not get another opportunity
outside of an open season.
The regulations specify that an enrollee may upgrade coverage at
any time, with full underwriting. An enrollee may also upgrade coverage
during an open season with the underwriting requirements and coverage
rules specified for that open season.
If an enrollee upgrades coverage by adding to the daily benefit
amount other than through the automatic compound inflation option, he
or she will then pay a ``blended'' premium, where the premium for that
amount of increased daily benefit is based on his or her age and
premium rates at the time of the purchase of the increased benefit
(also called the attained age), while the premium for the base
insurance purchased is still based on the enrollee's age and rates when
the base insurance was purchased. For example, if an enrollee chose at
age 55 a $125 daily benefit amount, he or she can decide at age 65 to
increase that coverage to $150. He or she will pay age 65-based
premiums for the additional $25 in coverage, but will continue to pay
age 55-based premiums for the initial $125 coverage. For other types of
coverage upgrades, premiums will be based on the enrollee's attained
age and the prevailing rate at the time of purchase.
An enrollee may also decrease or cancel coverage at any time. There
will be no refund of premiums paid for the portion of insurance
cancelled, unless he or she cancels during the ``free look'' period
specified in the benefit booklet. Any increase or decrease is subject
to the Program options available at the time of the change.
The Carrier will make insurability decisions for all applicants,
and these decisions are not appealable to OPM. This rule is identical
to the FEGLI Program rule, which vests all insurability decisions with
the Carrier. This requirement has worked very well for many years in
the FEGLI Program, and OPM expects the same outcome for the FLTCIP.
A standard feature of life and long term care insurance policies is
an incontestability clause, which allows for erroneous enrollments to
remain in effect under certain conditions. The FEGLI Program
regulations contain such a clause, and OPM is providing similar
protections under the FLTCIP.
However, it will be important for each applicant to complete the
enrollment application accurately and thoroughly. If the Carrier finds
that the applicant omitted, misstated, or misrepresented information on
the application, the Carrier may rescind coverage. This provision is
meant to protect the integrity of the FLTCIP, in terms of both premium
sufficiency and fairness to all applicants.
An enrollee must authorize the release of his or her medical
information within 3 weeks of the Carrier's request (4 weeks if he or
she is outside the United States). It is in an enrollee's best interest
to get the authorization to the Carrier as quickly as possible. Without
access to medical records, the Carrier cannot determine whether an
enrollee is eligible for benefits. If the enrollee does not provide the
authorization within this time period, the Carrier has the right to
deny claims for benefits or, as a last resort, void coverage.
The FLTCIP law provides for portability of coverage. Federal
civilian or Postal employees and members of the uniformed services and
their qualified relatives may maintain coverage if the employee or
member of the uniformed services transfers, retires, or separates from
service, so long as the Carrier continues to receive the premiums. The
premiums do not change because of these events. Once the employee or
member of the uniformed services leaves active service, however, he or
she is no longer eligible for any abbreviated underwriting provided
during an open season or other qualifying event. The portability
feature of the FLTCIP also extends to other individuals who separate
under the FERS MRA+10 provision. Enrolled qualified relatives may also
keep FLTCIP coverage when they lose qualified relative status, such as
upon divorce.
Coverage will terminate when the enrollee exhausts the benefits
available, does not timely pay the required premiums, or dies. If an
enrollee does not pay a premium on time, he or she will have a grace
period of 30 days in which he or she can bring payments up to date
before the Carrier may terminate coverage.
If an enrollee's coverage ends because he or she did not pay the
required premium, the Carrier will reinstate coverage if the Carrier
receives proof within 6 months of the date coverage ended that the
enrollee suffered a cognitive impairment such as Alzheimer's disease or
loss of functional capacity before the premium payment grace period
ended. In such an instance, the enrollee does not need to submit to any
further underwriting to restore the earlier coverage.
The Carrier may reinstate an enrollee's coverage for other reasons
within 12 months from the date coverage terminated. This provision
applies when an enrollee voluntarily cancels coverage or does not pay
the required premium. However, the enrollee must submit to full
underwriting and the Carrier will determine whether he or she is still
insurable. Coverage will be reinstated retroactively to the termination
date and he or she must pay back premiums for that period. The
enrollee's premium will be the same as it was prior to termination.
Lastly, FLTCIP benefits will be coordinated, according to National
Association of Insurance Commissioners (NAIC) guidelines, with other
government programs, group medical benefits, and other employer-
sponsored long term care insurance coverage so that benefit payments
are not duplicated. Coordination of benefits is a standard feature of
health and long term care insurance policies, and helps to keep costs
down by ensuring that payments do not exceed 100 percent of charges.
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it affects
only Federal employees, annuitants, members of the uniformed services,
retired members of
[[Page 5534]]
the uniformed services, their qualified relatives, and the FLTCIP
Carrier(s).
List of Subjects in 5 CFR Part 875
Administrative practices and procedures, Government contracts,
Government employees, Employee benefit plans, Health insurance,
Military personnel, Organization and functions, Retirement.
Office of Personnel Management.
Kay Coles James,
Director.
For the reasons stated in the preamble, the Office of Personnel
Management amends title 5, Code of Federal Regulations, by adding part
875 as follows:
PART 875--FEDERAL LONG TERM CARE INSURANCE PROGRAM
Subpart A--Administration and General Provisions
Sec.
875.101 Definitions.
875.102 Where do I send benefit claims?
875.103 Do I need to authorize release of my medical records when I
file a claim?
875.104 What are the steps required to resolve a dispute involving
benefit eligibility or payment of a claim?
875.105 May OPM correct errors?
875.106 What responsibilities do agencies have under this Program?
875.107 What are OPM's responsibilities as regulator under this
Program?
875.108 If the Carrier approves my application, will I get a
certificate of insurance?
875.109 Is there a delegation of authority for resolving contract
disputes between OPM and the Carrier?
Subpart B--Eligibility
Sec.
875.201 Am I eligible as a Federal civilian or Postal employee?
875.202 Am I eligible as a Federal annuitant?
875.203 Am I eligible if I separated under the FERS MRA+10
provision?
875.204 Am I eligible as a member of the uniformed services?
875.205 Am I eligible as a retired member of the uniformed services?
875.206 As a new Federal civilian or Postal employee or member of
the uniformed services, when may I apply?
875.207 What happens if I am in nonpay status during an open season?
875.208 May I apply as a qualified relative if the person on whom I
am basing my eligibility status has died?
875.209 How do I demonstrate that I am eligible to apply for
coverage?
875.210 What happens if I become ineligible after I submit an
application?
875.211 What happens if my eligibility status changes after I submit
an application?
875.212 Is there a minimum application age?
Subpart C--Cost
Sec.
875.301 Is there a Government contribution toward premiums?
875.302 What are the options for making premium payments?
875.303 How are premium payment errors corrected?
875.304 How does the Carrier account for FLTCIP funds?
Subpart D--Coverage
Sec.
875.401 How do I apply for coverage?
875.402 When will open seasons be held?
875.403 May I apply for coverage outside of an open season?
875.404 What is the effective date of coverage?
875.405 If I marry, may my new spouse apply for coverage?
875.406 May I change my coverage?
875.407 Who makes insurability decisions?
875.408 What is the significance of incontestability?
875.409 Must I provide an authorization to release medical
information?
875.410 May I continue my coverage when I leave Federal or military
service?
875.411 May I continue my coverage when I am no longer a qualified
relative?
875.412 When will my coverage terminate?
875.413 Is it possible to have coverage reinstated?
875.414 Will benefits be coordinated with other coverage?
Authority: 5 U.S.C. 9008.
Subpart A--Administration and General Provisions
Sec. 875.101 Definitions.
This part is written as if the reader were an applicant or
enrollee. Accordingly, the terms ``you,'' ``your,'' etc., refer, as
appropriate, to the applicant or enrollee.
In this part, the terms annuitant, employee, member of the
uniformed services, retired member of the uniformed services, and
qualified relative have the meanings set forth in section 9001 of title
5, United States Code, and supplement the following definitions:
Abbreviated underwriting is a type of underwriting that asks fewer
questions about your health status than with full underwriting to
enable the Carrier to determine whether your application for coverage
will be approved. The Carrier may also require review of your medical
records, a phone interview, or an in-home interview.
Actively at work means:
(1) For a Federal civilian or Postal employee, that you meet all of
the following conditions:
(i) You are reporting for work at your usual place of employment or
other location to which Government business requires you to travel;
(ii) You are able to perform all the usual and customary duties of
your employment on your regular work-schedule; and
(iii) You are not absent from work due to sickness, injury, annual
leave, sick leave or any other leave. (You are not considered to be on
leave on your alternate work schedule's scheduled day off.)
(2) For a member of the uniformed services, that you are on active
duty and are physically able to perform the duties of your position.
Carrier means a qualified carrier as defined in section 9001 of
title 5, United States Code, with which OPM has contracted to provide
long term care insurance coverage under this section. A Carrier may
designate 1 or more administrators to perform some of its obligations.
Eligible individual means an annuitant, Federal civilian or Postal
employee, member of the uniformed services, retired member of the
uniformed services or qualified relative, as defined in section 9001 of
title 5, United States Code.
Enrollee means an eligible individual whose application for
coverage the Carrier has approved and whose coverage is in effect.
FLTCIP means the Federal Long Term Care Insurance Program.
Free look means that within 30 days after you receive the Benefit
Booklet, you may cancel your coverage if you are not satisfied with it
and receive a refund of any premium you paid. It will be as if the
coverage was never issued.
Full underwriting is the more comprehensive type of underwriting
under the FLTCIP, which requires that you answer many questions about
your health status to enable the Carrier to determine whether your
application for coverage will be approved. The Carrier may also require
review of your medical records, a phone interview, or an in-home
interview.
Stepparent means any person, other than your mother or father, who
is currently married to one of your parents, or, if one of your parents
is dead, a person who was married to that parent at the time of that
parent's death.
Underwriting requirements means the information about your current
health status and history and other information that you must provide
to the Carrier with your application for coverage to enable the Carrier
to determine your insurability.
Workforce member means a Federal civilian or Postal employee,
member of the uniformed services, Federal annuitant, or a retired
member of the uniformed services, as defined in
[[Page 5535]]
section 9001 of title 5, United States Code.
Sec. 875.102 Where do I send benefit claims?
You must submit your benefit claims to the FLTCIP Carrier or its
designee.
Sec. 875.103 Do I need to authorize release of my medical records
when I file a claim?
Yes, if you file a claim for benefits, the Carrier needs to have a
valid authorization from you to release your medical records.
Sec. 875.104 What are the steps required to resolve a dispute
involving benefit eligibility or payment of a claim?
(a) If you dispute the Carrier's denial of your eligibility for
benefits or your claim for payment of benefits, you must first send a
written request for reconsideration to the Carrier no later than 60
days from the date of its decision.
(b) The Carrier must provide you with written notice of its review
decision no later than 60 days after the date it receives your
reconsideration request.
(c) If the Carrier upholds its denial (or does not respond within
60 days), you have the right to appeal its reconsideration decision.
You must make this appeal in writing within 60 days from the date of
the Carrier's notice upholding its decision. You will be notified of
the decision on your appeal in writing no later than 60 days from
receipt of your appeal request.
(d) If a denial of your eligibility for benefits or a denial of
your claim is upheld upon appeal due to the evaluation of your medical
condition/functional capacity, the Carrier will inform you that you may
request that an independent third party, mutually agreed to by OPM and
the Carrier, review the decision. You must make this request in writing
within 60 days from the date of the notice informing you of the appeal
decision. The independent third party must notify you in writing of its
decision no later than 60 days from the Carrier's or its designee's
receipt of your request for appeal to the third party. This is the
final administrative remedy available to you. The decision of the
independent third party is final and binding on the Carrier.
(e) You may seek judicial review of the final administrative denial
of a claim. Such action may not be brought prior to exhaustion of the
administrative process provided in this section. To pursue such
judicial review, you must bring legal action against the Carrier in an
appropriate United States district court within 2 years from the date
of the final decision. You may not sue OPM, the independent reviewer,
or any other entity. If you prevail in court, your recovery is limited
to the amount of benefits payable under your benefit booklet and
schedule of benefits.
Sec. 875.105 May OPM correct errors?
OPM may order correction of administrative errors after reviewing
evidence and finding that it would be against equity and good
conscience not to do so.
Sec. 875.106 What responsibilities do agencies have under this
Program?
Federal agencies and uniformed services establishments are
responsible for:
(a) Providing access to information about the FLTCIP to eligible
individuals;
(b) Responding to questions from the Carrier, including questions
on the employment status of an applicant or enrollee;
(c) Providing reports as OPM requires;
(d) Complying with Benefits Administration Letters and other OPM
issuances/instructions; and
(e) Deducting premiums as authorized by a workforce member and as
requested by the Carrier, when possible.
Sec. 875.107 What are OPM's responsibilities as regulator under this
Program?
Consistent with the authority and discretion given to OPM by the
FLTCIP law, OPM's responsibilities include those functions typically
associated with, and preemptive of, State insurance regulatory
authorities such as:
(a) Reviewing and approving the content and format of materials
associated with the FLTCIP pursuant to section 9008(d) of title 5,
United States Code;
(b) Reviewing and approving rates, forms, and marketing materials;
and
(c) Determining the qualifications of enrollment personnel and the
Program administrator(s).
Sec. 875.108 If the Carrier approves my application, will I get a
certificate of insurance?
If the Carrier approves your application for coverage, OPM and/or
the Carrier will make available to you a benefit booklet and schedule
of benefits with complete coverage information, which will serve as
your proof of insurance. You will also get a copy of your approved
application for coverage.
Sec. 875.109 Is there a delegation of authority for resolving
contract disputes between OPM and the Carrier?
For the purpose of making findings of fact and to the extent that
conclusions of law may be required under any proceeding conducted in
accordance with the provisions of the disputes clause included in the
FLTCIP master contract, OPM delegates this function to the Armed
Services Board of Contract Appeals.
Subpart B--Eligibility
Sec. 875.201 Am I eligible as a Federal civilian or Postal employee?
(a) If you are a Federal civilian or Postal employee whose current
position conveys eligibility for Federal Employees Health Benefits
under part 890 of this chapter, you are also eligible to apply for
coverage, with the following exceptions:
(1) If you are a District of Columbia employee or retiree, you are
not eligible to apply for coverage, regardless of whether you are
eligible for Federal Employees Health Benefits coverage.
(2) If you are a Tennessee Valley Authority employee or retiree,
you are eligible to apply for coverage, even though you may not be
eligible for Federal Employees Health Benefits coverage.
(b) If you are a Federal civilian or Postal employee whose current
position is excluded from Federal Employees Health Benefits eligibility
under Sec. 890.102 of this chapter, you are excluded from applying for
coverage unless paragraph (a)(2) of this section applies.
(c) If you are an annuitant reemployed by the Federal Government,
you may apply for coverage as an employee.
Sec. 875.202 Am I eligible as a Federal annuitant?
If you are a Federal annuitant, including a survivor annuitant, a
deferred annuitant, or a compensationer, you are eligible to apply for
coverage. If you are a deferred annuitant, you may apply for coverage
only after you begin receiving your annuity.
Sec. 875.203 Am I eligible if I separated under the FERS MRA+10
provision?
If you have separated from service under the FERS Minimum
Retirement Age and 10 years of service (MRA+10) provision of 5 U.S.C.
8412(g), and have postponed receiving an annuity under that provision,
you are eligible to apply for coverage under this part. For
underwriting purposes, you will be considered an annuitant.
Sec. 875.204 Am I eligible as a member of the uniformed services?
(a) You are eligible to apply for coverage if you are on active
duty or full-time National Guard duty for more than a 30-day period.
[[Page 5536]]
(b) You are eligible to apply for coverage if you are a member of
the Selected Reserve, which consists of:
(1) Drilling Reservists and Guardsmembers assigned to Reserve
Component Units;
(2) Individual Mobilization Augmentees who are Reservists assigned
to Reserve Component billets in Active Component units (you may be
performing duty in a pay or non-pay status); and
(3) Active Guard and Reserve members who are full-time Reserve
members on full-time National Guard duty or active duty in support of
the National Guard or Reserves.
(c) You are not eligible to apply for coverage if you belong to the
Individual Ready Reserve. The Individual Ready Reserves includes
Reservists who are assigned to a Voluntary Training Unit in the Naval
Reserve and Category E in the Air Force Reserve.
Sec. 875.205 Am I eligible as a retired member of the uniformed
services?
(a) You are eligible to apply for coverage if you are a retired
member of the uniformed services entitled to retired or retainer pay
(including disability retirement pay).
(b) You are eligible to apply for coverage if you are a retired
reservist who is currently receiving retirement pay.
Sec. 875.206 As a new Federal civilian or Postal employee or member
of the uniformed services, when may I apply?
(a) As a new, newly eligible, or returning Federal civilian or
Postal employee or member of the uniformed services, you may apply as
follows:
(1) If you are a new Federal civilian or Postal employee or member
of the uniformed services entering a position that conveys eligibility,
you may apply for coverage within 60 days after becoming eligible.
(2) If you are entering a position that conveys eligibility as a
Federal civilian or Postal employee or member of the uniformed services
from a position that did not convey eligibility, you may apply for
coverage within 60 days after becoming eligible.
(3) If you return to Federal civilian or Postal service or the
uniformed services after a break in service of 180 days or more to a
position that conveys eligibility, you may apply for coverage within 60
days after becoming eligible.
(b) Your spouse may also apply during that 60-day period after you
become eligible.
(c) The underwriting requirements that will be applicable will be
those required of Federal civilian and Postal employees and members of
the uniformed services and their spouses during the last open season
for enrollment before the date of your application.
(d) After the 60-day period ends, you may still apply for coverage,
as may your spouse, but full underwriting requirements will apply.
(e) If your employing office determines that you were unable, for a
cause beyond your control, to submit an application during the initial
60-day period, you may submit an application within 60 days after your
employing office advises you of that determination. Similarly, your
employing office may make this determination if your spouse is unable
to submit an application during the same time period for a cause beyond
his/her control. This employing office authority only applies within 6
months after the beginning date of the initial eligibility period. The
underwriting requirements will be as specified in paragraph (c) of this
section.
(f) Your other qualified relatives may apply for coverage at any
time. They will be subject to full underwriting requirements.
Sec. 875.207 What happens if I am in nonpay status during an open
season?
(a) If you return to a pay status from nonpay status during the
open season, you have 60 days from the date of your return, or until
the end of the open season, whichever gives you more time, to apply for
coverage pursuant to the open season underwriting requirements for
Federal civilian or Postal employees and members of the uniformed
services.
(b) If you return to pay status from nonpay status after the open
season, you have 60 days from the date of your return to apply for
coverage pursuant to the underwriting requirements specified for
Federal civilian or Postal employees and members of the uniformed
services in the immediately preceding open season.
(c) Paragraphs (a) and (b) of this section apply only when you have
been in nonpay status for more than one-half of an open season, unless
you went into nonpay status for a reason beyond your control.
Sec. 875.208 May I apply as a qualified relative if the person on
whom I am basing my eligibility status has died?
You may not apply as a qualified relative if the workforce member
on whom you are basing your qualified relative status died prior to the
time you apply for coverage, unless you are receiving a survivor
annuity as the spouse of a deceased workforce member.
Sec. 875.209 How do I demonstrate that I am eligible to apply for
coverage?
(a) When you submit your application for coverage, you must make
known your status as a member of an eligible group.
(b) If the Carrier finds that you misrepresented your eligibility
status, the Carrier has the right to void your coverage and return to
you any premiums you paid, without interest. The incontestability
provisions in Sec. 875.409 do not apply to this section.
Sec. 875.210 What happens if I become ineligible after I submit an
application?
(a) You must be eligible at the time of your application and at the
time your coverage is scheduled to go into effect. Except as noted in
paragraph (b) of this section, if you lose your status as part of an
eligible group before your coverage goes into effect, you are no longer
eligible for FLTCIP coverage. You are required to inform the Carrier
that you are no longer eligible.
(b) In two instances, you will continue to be eligible for coverage
even if you lose your status as part of an eligible group after you
submit an application for coverage, but before your coverage becomes
effective. The two instances are:
(1) When you are involuntarily separated from Federal civilian
service (except for misconduct) or from the uniformed services (except
for a dishonorable discharge). In either of these events, your
qualified relatives will continue to be eligible.
(2) When you are the qualified relative of a workforce member who
dies.
Sec. 875.211 What happens if my eligibility status changes after I
submit an application?
(a) If you applied as a Federal civilian or Postal employee or
member of the uniformed services, and separate from service under the
MRA+10 provisions of 5 U.S.C. 8412(g), or retire after you submit an
application for coverage, but before your coverage becomes effective,
you must reapply as an annuitant and submit to full underwriting
requirements.
(b) If you applied as a Federal civilian or Postal employee or
member of the uniformed services, and otherwise separate from service,
but you are a qualified relative of another workforce member, you must
reapply based on the additional underwriting requirements specified for
that type of qualified relative.
[[Page 5537]]
Sec. 875.212 Is there a minimum application age?
Yes, there is a minimum application age. You must be at least 18
years old at the time you submit an application for coverage.
Subpart C--Cost
Sec. 875.301 Is there a Government contribution toward premiums?
There is no Government premium contribution toward the cost of long
term care insurance.
Sec. 875.302 What are the options for making premium payments?
(a) Premium payments may be made by Federal payroll or annuity
deduction, uniformed services retirement pay deduction, by pre-
authorized debit, or by direct billing.
(b) You must continue to make premium payments when they are due
for your coverage to stay in effect.
Sec. 875.303 How are premium payment errors corrected?
(a) If the Carrier finds that you have underpaid the premium rate
for your age and/or level of coverage, you must pay retroactive
premiums to the Carrier for the amount due. If you fail to pay back
premiums within the time provided by the Carrier to correct the error,
the Carrier may terminate your coverage.
(b) If the Carrier finds that you have overpaid premiums, the
Carrier will either reimburse you or reduce a future premium payment(s)
by the amount of the overpayment.
(c) If you die while you have coverage, any premiums paid for the
period beyond the date of your death will be refunded to your estate or
to an alternate payee. If there is no estate, the Carrier will
determine whether to pay the refund to an alternate payee. If you
cancel your coverage, any premiums paid in advance for the period
following the effective date of your cancellation will be refunded to
you.
(d) Any premiums you paid will be returned if you cancel coverage
within the ``free look'' period specified in the benefit booklet.
Sec. 875.304 How does the Carrier account for FLTCIP funds?
The Carrier must keep account of all funds received under this
section separate from all other funds. The Carrier may use FLTCIP funds
only for purposes specifically related to the FLTCIP.
Subpart D--Coverage
Sec. 875.401 How do I apply for coverage?
(a) To apply for coverage, you must complete the application in a
form appropriate for your eligibility status as prescribed by the
Carrier and approved by OPM.
(b) If you are the qualified relative of a workforce member, you
may apply for coverage even if the workforce member does not apply for
coverage.
Sec. 875.402 When will open seasons be held?
(a) The first open season for enrollment under this section began
July 1, 2002, as described in a Federal Register Notice (67 FR 43691,
June 28, 2002), including the open season ending date(s) and which
eligible individuals may apply based on abbreviated underwriting.
(b) There are no regularly scheduled open seasons for long term
care insurance. OPM will announce any subsequent open seasons via a
Federal Register Notice. The Notice will include the requirements for
applicants during the open season.
Sec. 875.403 May I apply for coverage outside of an open season?
If you are eligible for coverage, you may submit an application at
any time outside of an open season. You will be subject to full
underwriting requirements.
Sec. 875.404 What is the effective date of coverage?
(a) The effective dates of coverage under open season enrollments
will be announced in a Federal Register Notice that announces open
season dates.
(b)(1) If you enroll at any time outside of an open season, your
coverage effective date is the 1st day of the month after the date your
application is approved.
(2) If you are a Federal civilian or Postal employee or member of
the uniformed services and you are applying for coverage under
abbreviated underwriting, you also must be actively at work on your
coverage effective date for your coverage to become effective. If your
coverage effective date falls on a weekend or holiday, you must be
actively at work on the last workday before that date for coverage to
become effective. You must inform the Carrier if you are not actively
at work on your coverage effective date. In that event, the Carrier
will issue you a revised effective date, which will be the 1st day of
the month after the date you return to being actively at work. You also
must be actively at work on any revised effective date for coverage to
become effective, or you will be issued another revised effective date
in the same manner.
Sec. 875.405 If I marry, may my new spouse apply for coverage?
(a)(1) If you are a Federal civilian or Postal employee or member
of the uniformed services and you have married, your spouse is eligible
to submit an application for coverage under this section within 60 days
from the date of your marriage, and will be subject to the underwriting
requirements in force for the spouses of civilian employees and members
of the uniformed services during the most recent open season. You,
however, are not eligible for abbreviated underwriting because of your
marriage. You may apply for coverage along with your spouse, but full
underwriting will be required for you.
(2) After 60 days, your spouse may still apply for coverage but
will be subject to full underwriting. Your new qualified relatives
(such as parents-in-law) may apply for coverage with full underwriting
at any time following the marriage.
(b) The new spouse and other qualified relatives of an annuitant or
retired member of the uniformed services may apply for coverage with
full underwriting at any time following the marriage.
Sec. 875.406 May I change my coverage?
(a) You may make the following changes to your coverage:
(1) You may apply to increase your coverage at any time. Full
underwriting is required, except when an open season allows abbreviated
underwriting.
(2) If you increase your coverage by adding to your daily benefit
amount, the premiums for the additional coverage will be based on your
age, prevailing premium rates, and coverage rules in effect at the time
you purchase the additional coverage.
(3) For other types of coverage increases, your entire premium will
be based on your age, prevailing premium rates, and coverage rules in
effect at the time you purchase the increased coverage. Any increase in
coverage will take effect on the 1st day of the month following the
date the Carrier approves your request for an increase.
(b) You may decrease your coverage at any time, although any
decrease will be subject to coverage rules at the time of the decrease.
Decreased coverage takes effect on the 1st day of the month after the
Carrier receives your request. You will not receive any refund of
premiums paid for coverage you held before the decrease; however, your
subsequent
[[Page 5538]]
premiums will be reduced based on your new, lower level of coverage.
The Carrier will refund or credit any portion of premium paid in
advance for the period following the date on which you decrease your
coverage.
(c) You may cancel your coverage at any time.
(1) If you cancel during the free look period, your premiums will
be refunded to you.
(2) If you cancel your coverage at any time other than during the
free look period, cancellation will take effect on your requested
cancellation date or at the end of the period covered by your last
premium payment, whichever occurs first. You will not receive any
refund of premiums paid, other than any premiums paid in advance for
the period following the effective date of your cancellation of
coverage, and you will not have to pay any more premiums unless you
owed retroactive premiums.
Sec. 875.407 Who makes insurability decisions?
The Carrier determines the insurability of all applicants. The
Carrier's decision may not be appealed to OPM.
Sec. 875.408 What is the significance of incontestability?
(a) Incontestability means coverage issued based on an erroneous
application may remain in effect. Such coverage will not remain in
effect, and your claim may be denied, under any of the following
conditions:
(1) If your coverage has been in force for less than 6 months, the
Carrier may void your coverage or deny a claim upon a showing that
information on your signed application that was material to your
approval for coverage is different than what is shown in your medical
records.
(2) If your coverage has been in force for at least 6 months but
less than 2 years, the Carrier may void your coverage or deny a claim
upon a showing that information on your signed application that was
material to your approval for coverage is different than what is shown
in your medical records, and pertains to the condition for which
benefits are sought.
(3) After your coverage has been in effect for 2 years, the Carrier
may void your coverage only upon a showing that you knowingly and
intentionally made a false or misleading statement or omitted
information in your signed application for coverage regarding your
health status.
(b) Your coverage can be contested at any time when the Carrier
finds that you were not an eligible individual at the time you applied
and were approved for coverage.
(c) If the Carrier voids coverage after it has paid benefits, it
cannot recover the benefits already paid.
(d) Incontestability does not apply when you have not paid your
premiums on a timely basis.
Sec. 875.409 Must I provide an authorization to release medical
information?
You must provide the Carrier with an authorization to release
medical information when requested. The Carrier may deny a claim for
benefits or void your coverage if the Carrier does not receive an
authorization to release medical information within 3 weeks after its
request (4 weeks for those outside the United States).
Sec. 875.410 May I continue my coverage when I leave Federal or
military service?
If you are a Federal civilian or Postal employee or member of the
uniformed services, your coverage will automatically continue when you
leave active service, as long as the Carrier continues to receive the
required premium when due. However, once you leave active service, you
are no longer eligible for any abbreviated underwriting provided during
any future open season.
Sec. 875.411 May I continue my coverage when I am no longer a
qualified relative?
If you are already enrolled as a qualified relative, you may
continue your FLTCIP coverage if you subsequently lose qualified
relative status (such as upon divorce), as long as the Carrier receives
the required premium when due.
Sec. 875.412 When will my coverage terminate?
Your coverage will terminate on the earliest of the following
dates:
(a) The date you specify to the Carrier that you wish your coverage
to end;
(b) The date of your death;
(c) The end of the period covered by your last premium payment if
you do not pay the required premiums when due, after a grace period of
30 days; or
(d) The date you have exhausted your maximum lifetime benefit.
(However, in this event, care coordination services will continue.)
Sec. 875.413 Is it possible to have coverage reinstated?
(a) Under certain circumstances, your coverage can be reinstated.
The Carrier will reinstate your coverage if it receives proof
satisfactory to it, within 6 months from the termination date, that you
suffered from a cognitive impairment or loss of functional capacity,
before the grace period ended, that caused you to miss making premium
payments. In that event, you will not be required to submit to
underwriting. Your coverage will be reinstated retroactively to the
termination date but you must pay back premiums for that period. The
premium will be the same as it was prior to termination.
(b) If your coverage has terminated because you did not pay
premiums or because you requested cancellation, the Carrier may
reinstate your coverage within 12 months from the termination date at
your request. You will be required to reapply based on full
underwriting, and the Carrier will determine whether you are still
insurable. If you are insurable, your coverage will be reinstated
retroactively to the termination date and you must pay back premiums
for that period. The premium will be the same as it was prior to
termination.
Sec. 875.414 Will benefits be coordinated with other coverage?
Yes, benefits will be coordinated with other plans, following the
coordination of benefits (COB) guidelines set by the National
Association of Insurance Commissioners. The total benefits from all
plans that pay a long term care benefit to you should not exceed the
actual costs you incur. The other plans that are considered for COB
purposes include government programs, group medical benefits, and other
employer-sponsored long term care insurance plans. Medicaid, individual
insurance policies, and association group insurance policies are not
taken into consideration under this provision.
[FR Doc. 03-2463 Filed 2-3-03; 8:45 am]
BILLING CODE 6325-50-P